Global Mining Investing is a reference eBook to teach investors how to think and act as investors with a underlying theme of managing risk. The book touches on a huge amount of content which heavily relies on knowledge that can only be obtained through experience...The text was engaging, as I knew the valuable outcome was to be a better thinker and investor.

While some books (such as Coulson’s An Insider’s Guide to the Mining Sector) focus on one particular commodity this book (Global Mining Investing) attempts (and does well) to cover all types of mining and commodities.

Wednesday, August 24, 2005

There are a great many financial planners and accountants recommending diversification and `buy and hold` strategies. Their argument is that broad equity indices have grown in real terms of XX% per annum over the last 20 years. There is no disputing those facts, but several points need to be made:

These long term yields depend upon your period of observation

Current equities are at record PE ratios - due for a tumble

There is no question that humans are not omniscient, and thus should diversify, but you get to a point where you can only watch and understand so many markets, so it might be a better decision to monitor a particular set of markets more closely than more markets. This also guards against an unforeseen `systematic risk`. A systematic risk is a concealed risk that a market might fall because of falls in other markets. In the last 20 years, the US and other western governments have greatly increased money supply, credit growth, fuelling an asset bubble, starting with the dot.com bubble in Sept 2000, and more recently property & broader equity bubbles. We are thus due for a huge fall in equities and property markets which will quash consumer & business spending.

In 1928, investors taking positions in the market would have had to wait until the 1940s to recoup their capital. Quite apart from the desire to conserve capital, there is a huge opportunity cost in taking unnecessary, ill-timed investments.

Technical analysis offers investors some simple tools for understanding investment timing - when to buy and sell. There is no point investing in markets if there is evidence its in a long term downtrend -unless you are trading for short term profits. It makes more sense to identify growth markets.

When asset values are artificially inflated by `easy monetary policy` it makes sense to invest in real assets - as opposed to `paper-inflated` financial assets like equities, property. The real assets are commodities (food, precious & industrial metals, energy). The best real assets are those that are not impacted by weaker global demand - thus gold and food make the greatest sense. Go for the more profitable equities market if the yields (PERs) are not inflated by bullish market conditions.

Risk ManagementThere is a perception that investors can protect their position with derivatives, but these instruments are voodoo, since there is no escaping the existence of a counterparty to any `unlimited` risk which is limited by the counter-party. Someone is wearing the exposure, and given the extent of derivative contracts outstanding relative to the physical market, there is huge potential for derivatives to destroy financial markets. In a crash or unexpected market move, there is every likelihood that derivatives will offer little or no protection, and the market is too large for any central bank to prop up. Furthermore, its your managed funds that are at risk.There are only a few guidelines for risk management:

Avoid systematic risks

Avoid investing more than you can afford to loose.

Use technicals to pick entry & exit points. ie. If the market is telling you that

Risk is often inversely correlated with returns, but in fact we all have a different perception of risk, and a different understanding of markets. Understanding market fundamentals is a full-time job. My advice is try to identify analysts that pick market trends more consistently. You dont normally find them in newspapers, or among financial journalists. I recommend:

Morgan Stanley GEP Digests Archives

Kitco essay contributors

The Conference Board

Max Walsh `the Bulletin`

Most get issues of timing wrong, which is why fundamentals commentary should help you identify the opportunity, but charts should tell you when to buy and sell.

There is a ATO tax rule that saids if you buy stocks mainly for gains, you may attract the full income tax rate rather than the 50% concessional rate. Under Section 118-20 of the CGT rules, income tax rules take precedence over capital gains tax laws. Peter Bobbin, senior partner of Argyle Partnership saids `if investors buy stock mainly to make gains, they may attract the full income tax rate rather than just the 50% concessional capital gains tax rate`. Fortunately my investment strategy is not about making gains, in fact I don`t invest in alot of the companies I identify here. I invest only in those companies with whom I respect their objectives and management. So I leave the tax to all the `vulgar materialists`. eg. For instance last year I choose to make a loss even though charts said the market was in a long term decline.

`The common wisdom is that you get a capital gains tax concession if you sell shares after holding them for 12 months. But that is not true. You only get the 12mth CGT concession where you purchased the shares for the income they would generate, such as dividends` says Bobbins. The only way to avoid such nonsense is to incorporate.

Does anyone still believe tax is `well-intentioned` welfare redistribution? Are you tired of trying to jump through the ATO hoops and hurdles? FIGHT FOR REFORM - limit the unaccountable power of governments! The ATO is prepared to enforce this law - fighting in 2004 against a women who traded St George Bank shares.

The easiest solution is to document the reasons why you buy a share. If you intewnd to claim the concession, then your stated aim should be to generate income, not to make a capital gain. If you incorporate, then you are able to realise gains at the flat corporate tax rate.

Over the years, this ebook has been enhanced with additional research to offer a comprehensive appraisal of the Japanese foreclosed property market, as well as offering economic and industry analysis. The author travels to Japan regularly to keep abreast of the local market conditions, and has purchased several foreclosed properties, as well as bidding on others. Japan is one of the few markets offering high-yielding property investment opportunities. Contrary to the 'rural depopulation' scepticism, the urban centres are growing, and they have always been a magnet for expatriates in Asia. Japan is a place where expats, investors (big or small) can make highly profitable real estate investments. Japan is a large market, with a plethora of cheap properties up for tender by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. There is a plethora of property is depopulating rural areas, however there are fortnightly tenders offering plenty of property in Japan's cities as well. I bought a dormitory 1hr from Tokyo for just $US30,000.You can view foreclosed properties listed for as little as $US10,000 in Japan thanks to depopulation and a culture that is geared towards working for the state. I bought foreclosed properties in Japan and now I reveal all in our expanded 350+page report. The information you need to know, strategies to apply, where to get help, and the tools to use. We even help you avoid the tsunami and nuclear risks since I was a geologist/mining finance analyst in a past life. Check out the "feedback" in our blog for stories of success by customers of our previous reports.

The Philippines property market remains one of the strongest in Asia thanks to rising incomes, rising population and rapid rates of urbanisation. The administrative reforms of the Arroyo government have given way to improved administration under Aquino. ASEAN countries can be expected to achieve even greater price gains than Western markets, demonstrating that this super cycle is far from over. Buying Philippines Property 2010 - Downloadthe table of contents or buy this 2-volume eBook at our online store for just $US19.95.

Investment Strategy

If you are investing for the long term, you still need an investment strategy. Dont be fooled by the rhetoric of fund managers. The reason they advise you to 'buy & hold' is because they dont want to compete with you in sell-offs. Markets and industrial sectors are cyclical, so they demand trading to get the best returns. Fund managers actually cant hope to match the performance of small investors (if you are half good) because they have to manage huge amounts of funds and charge you a fee besides.MY ADVICE is (i) look at a range of market indices and decide upon what level of correction would give you the justification you need to get in & out of the market. It might be a 5-10% retracement or a break of trend. (ii) Diversify if you dont have an intimate knowledge of the company or management. More than 30% in one company is aggressive.

The NZ property market is shaping up as one of the most attractive property investment markets for the next few years. High yielding property and the collapse of the NZD make NZ the perfect counter-cyclical investment if you buy right! In addition, there is no capital gains tax, transfer taxes, VAT/GST or wealth taxes in NZ, so rest assured that NZ property is tax-effective! Learn more now!

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Pertinent Indices - US only

Over the years, this ebook has been enhanced with additional research to offer a comprehensive appraisal of the Japanese foreclosed property market, as well as offering economic and industry analysis. The author travels to Japan regularly to keep abreast of the local market conditions, and has purchased several foreclosed properties, as well as bidding on others. Japan is one of the few markets offering high-yielding property investment opportunities. Contrary to the 'rural depopulation' scepticism, the urban centres are growing, and they have always been a magnet for expatriates in Asia. Japan is a place where expats, investors (big or small) can make highly profitable real estate investments. Japan is a large market, with a plethora of cheap properties up for tender by the courts. Few other Western nations offer such cheap property so close to major infrastructure. Japan is unique in this respect, and it offers such a different life experience, which also makes it special. There is a plethora of property is depopulating rural areas, however there are fortnightly tenders offering plenty of property in Japan's cities as well. I bought a dormitory 1hr from Tokyo for just $US30,000.You can view foreclosed properties listed for as little as $US10,000 in Japan thanks to depopulation and a culture that is geared towards working for the state. I bought foreclosed properties in Japan and now I reveal all in our expanded 350+page report. The information you need to know, strategies to apply, where to get help, and the tools to use. We even help you avoid the tsunami and nuclear risks since I was a geologist/mining finance analyst in a past life. Check out the "feedback" in our blog for stories of success by customers of our previous reports.